The job market is recovering from the devastating hit the nation took at the start of the COVID-19 pandemic — but workers are resigning at record rates. Though 2021’s vaccine rollouts and lifted travel restrictions allowed companies to open more positions, job vacancies have soared to an all-time high, with over one million posts available in the UK. 4 million Americans quit their jobs in July 2021. Resignations peaked in April, according to the U.S Bureau of Labor Statistics, and have remained abnormally high for the last several months, with a record-breaking 10.9 million open jobs at the end of that month. The cost of these unfilled positions only worsens as quit rates rise, with 41% of the global workforce reporting plans to leave their employers within the next year. This phenomenon has been dubbed the “Great Resignation.”
Article written by Zea Peay
Why are workers quitting?
People lost their jobs at an alarming rate at the onset of the pandemic in 2020. Unemployment data from FXCM shows that the jobless population of the UK reached 1.62 million people, accounting for an unemployment rate of about 4.8%. And though the crisis caused a lot of severe economic distress, it also spurred a dramatic shift in priorities. Mass layoffs exposed unsupportive working environments, leading to insecurity even in those workers who remained employed. Subsequently, mass resignations signaled that employees were no longer willing to accept employment from companies that treated them as dispensable resources.
Additionally, time away from work forces individuals to acknowledge their other obligations, such as their families, their physical and mental health, and even their hobbies. Analysis by psychologist Anthony Klotz suggested that increased exposure to death and illness caused people to reflect on existential questions, such as whether their sense of personal purpose aligned with the ways in which they were spending their lives.
Such self-evaluations led to a shift in life direction. Therefore, one of the reasons for the Great Resignation is that employees who valued families quit work to spend more time with them, while employees who valued personal freedom sought jobs that offered more leisure time and vacation days. Both unemployment and remote working conditions also forced many to realize that they were shaping their entire lives around work when it should have been the other way around.
What does the Great Resignation cost employers?
As turnover rates rise, companies need to dedicate time and resources to replacing employees. There’s also the matter of lost productivity. Unfulfilled roles cause halted projects, delayed outputs, and decreased revenue.
However, it’s the employees that keep their positions who suffer the most. Our write-up entitled Offboarding and Outplacement – Overview and Best Practices’ made note of a phenomenon called “survivor syndrome,” which refers to the stress remaining employees feel after downsizing. Those afflicted with survivor’s syndrome have experienced increased stress due to changes in work circumstances, the feeling of uncertainty, and the additional responsibilities placed on them to compensate for unfilled positions. Survivor’s syndrome inevitably causes drops in performance, efficiency, and engagement.
Finally, as discussed above, overly stressed employees and employees who fear losing their positions may also quit voluntarily, further increasing turnover and reinforcing a vicious cycle.
How can HR departments spare their organizations from this phenomenon?
First foremost, organizations will have to focus on maintaining and regaining productivity as efficiently as possible. In many cases, this will involve upskilling and reskilling remaining employees and new hires, often with respect to emerging tech applications in workplaces. Research from the McKinsey Global Institute predicts that advances in artificial intelligence technology will cause 14% of the global workforce to shift occupations –– not lose them –– by 2030. This suggests that organizations can actually build new, productive opportunities through reskilling.
More to the point of what’s happened in the past 18 months, there is also a straightforward and direct solution for organizations, which is to improve conditions for workers. A survey conducted by digital mental health care company Talkspace interviewed workers who have been part of the “Great Resignation” about the factors that would persuade them to stay on in their jobs. The majority responded that they wanted better pay and benefits. Following that, 59% said they wanted managers who prioritized mental health, while 52% said they wanted mental health services.
Upskilling and reskilling development
Supporting opportunities for career growth and upward mobility within the company helps companies communicate to their employees that the employees are valued. By providing upskilling and reskilling opportunities, companies can improve employee retention and cut down on additional recruitment costs. Companies can also use learning software to streamline employee development. The HCM Deck learning management solutions in particular help companies place their learning resources in a single database that employees can easily access.
Reskilling and upskilling in one place, all engaging for your employee, all easy to manage.
Better pay and benefits
Employees simply want better compensation for the work they do, especially considering the financial turbulence of the current decade. Additionally, the COVID-19 pandemic has shifted priorities toward health, safety, and security. Accordingly, Human Resource Executive’s overview of benefits trends in 2021 predicts an increased demand for emergency savings benefits, flexible work options, and mental health support. Parents who work from home are also seeking additional childcare benefits to help balance work and family at home. Companies looking to reverse resignation trends and boost productivity would do well to take all of this into account.
Gallup’s 2020 workplace insights show that workplace burnout is more rooted in bad management than long hours. Employees that feel supported feel less stressed doing work, which leads to higher productivity. Managers can also give employees more feedback to keep employees engaged and give a clear idea of company expectations.
Mental health services
Pressure from work only adds to the stress induced by the pandemic. Employees can only be productive if they are healthy, both physically and mentally. To support employees’ mental health, employers can subsidize clinical screenings from mental health professionals, and make mental health-related resources available. Certain benefits, like health insurance and flexible work hours, might also help to reduce stress in employees.
Workers are the backbone of any business. It’s time we provide them the support they deserve, both for their own wellbeing and so that they remain loyal and in our employ. When you make your employees feel valued, they pay you back in loyalty, productivity, and revenue.